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Strategies & Market Trends : Underexposed Technical Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Underexposed who wrote (729)	1/16/2020 7:56:48 PM
From: robert b furman	Read Replies (1) \| Respond to of 914

Hi UE, The all time high for Cohu is $61.75 on march of 2000. screencast.com What this chart shows is perhaps a record long term consolidation of 20 years. My definition of a consolidation is more strength later. It is good for a 600% runup at the consolidation price of $12.50 - 15.00ish imo - a very long term view! During that time period Cohu has consolidated and reached Number 1 market share in every type of test handler there is globally. Their Total Addressable Market (TAM) has doubled in the last 15 months! The recent acquisition of XCerra also brought inspection of RF chips and printed circuit boards. 55% of its current revenue (at trough new system orders) is at very high margins - mid 60% and they just bumped their guidance and confirmed the trade tariffs are not impacting their revenue! This as new systems have troughed and are just beginning to ramp with 5G! A new and inexpensive method of creating integrated circuit chips is called "advanced packaging" by Brooks Automation and "Wafer Scale Level Packaging" by Cohu. This technique is used for mobile phone handset chips and represents about 20 % of all chips made. There are not enough statistics on this new category , but it is fast growing and both Brks and Cohu are leaders within this new and growing sector. Suffice it to say they are aggressively maintaining their market share leadership in the handling of semiconductors as they are put through electrical testing. You are right to note a very fast advance in the price of the stock and it is due a retracement. imo It will be very fast price action as has been the rise, and I'm not sure of the duration. I'd expect a fib retracement of 38.2% to 50% of this big wave up from 15.00ish. I think the better way of protecting the gains is to sell calls, which supplement the dividend return and not trigger a tax event which would draw funds from the account. I know that approach is not standard book learning. I hate creating a taxable event which draws funds from an account. Sell calls, collect the premium such that it yields the account an additional income (pay taxes on that supplementary gain), and weather the decline and its associated drawdown. View it as good money to hold onto as it yields 4-5 %. When the stock gets back to 60, you'll be glad you held and collected some good dividends and call premium money. Keep in mind the call premium may well result in a sale, but it will be at an above market sale vs a stop loss at a discounted price - it's the better sale! That's just me. As always, it is a privilege to study your regular excellent analysis. It's safe to say I'm beginning to think like you, in greater detail than I have in the past. A hardy Thanks for your help! Full disclosure: I've owned Cohu since 1978 ! Been completely in and out of it 3 different times. I go to the stockholder meetings and have known the last 3 CEO's. It is my largest holding and it is double tough to own, but elating when it runs up ( like now!) They are conservative with their money like you or I are with our family budget. It has been my largest position for three separate times over 42 years. Their future is stable and better than ever before in my humble opinion. They will become a merger candidate by AMAT, ATE, TER or AVAGO. This will happen when they realize that with owning Cohu, they can literally control the cost of every semiconductor made in the world - they will control cost of test. Test is something 100% of chips must go through. Those who have been for 23 years have heard me say this ad nauseam. I admit it. LOL Bob